Backed by the Federal Housing Administration, FHA loans are extremely popular among first time homebuyers and others interested in low down payment mortgage options. FHA loans make it possible to put as little as 3.5% down on a home purchase or borrow up to 97.75% with an FHA refinance. There are also FHA loans that make the purchase and renovation or repair of a home affordable and easy through one mortgage loan or refinance.
Each of these programs is backed by an agency of the US government, meaning they insure the lender against losses should the home go into default or foreclosure. This allows lenders to offer more favorable terms to borrowers and creates many home ownership opportunities.